A long-lasting legal dispute between IT contractor CA Technologies and the federal government reached a conclusion last week, as the Justice Department announced the company agreed to pay $45 million to settle allegations that it overcharged and provided false pricing information to the government.

The backstory of this conflict signifies a more aggressive stance taken by the government in dealing with contractors that mislead the government or bilk taxpayers. Public statements by both DOJ and the General Services Administration’s inspector general further suggest they are more willing than ever to prosecute contractors that play ball unfairly—even if it takes years to do so, as it did with CA.

DOJ contends New York-based CA submitted false pricing data in 2007 and again in 2009 regarding products it sold through the GSA’s Schedule 70, a multiple-awards schedule and large acquisition vehicle federal agencies use to purchase various IT products and services.

A General Services Administration Inspector General audit released last week suggests outdated or inaccurate pricing information provided by contractors regarding products and services on the GSA Schedules Program may cost taxpayers as much as $405 million per year.

The audit is the fourth in a series of IG reports highlighting issues in GSA’s Schedules Program, under which the Federal Acquisition Service has established numerous governmentwide contracting vehicles for commercial goods and services.

Agencies use the Schedules Program to purchase everything from pens and paper to complex cybersecurity services at a clip of about $32 billion in sales in fiscal 2014.

A General Services Administration’s top acquisition official has promised an improved Schedule 70 following an audit that found price discrepancies for identical products and some offered at higher prices than they were commercially available.

Mary Davie, the assistant commissioner of the Office of Integrated Technology Services, responded to the inspector general audit in a recent blog post, acknowledging the legitimacy of the report while explaining the years-long progress made to improve the Multiple Awards Schedules program.

“We agree with [the IG’s] concerns, which is why we have been working for the past three years to fundamentally transform the MAS program, reduce prices and streamline processes,” Davie said.

As commercial item contracts, GSA Schedules are subject to streamlined acquisition procedures intended to make the procurement process more efficient. One of the biggest advantages the Schedules offer ordering agencies is pre-negotiated pricing that has already been determined to be fair and reasonable.

Over the past several years, concern about pricing variability among the same or similar items on different schedule contracts led some agencies to publicly question whether they could rely on rates negotiated by the General Services Administration (GSA).

In March of 2014, the Department of Defense (DoD) issued a class deviation to FAR 8.404(d) requiring its contracting officers to make their own determination that GSA order prices were fair and reasonable using the proposal analysis techniques under FAR 15.404-1. NASA quickly did the same.

With federal procurement policy, where DoD goes, other agencies frequently follow. It isn’t surprising then that a new FAR case (2015-021) came out a year later proposing to overwrite 8.404(d) to match the language in the class deviations. If this FAR case makes it through the rulemaking process, it means that ordering agencies will have to complete a fair and reasonable price evaluation for all GSA schedule orders.

At the very least, agency contracting officers will be required to “obtain appropriate data, without certification, on the prices at which the same or similar items have previously been sold and determine if the data is adequate for evaluating the reasonableness of the price.” GSA’s contracting officers already do this when negotiating schedule pricing.

DCMA regularly conducts reviews of each unit of the Department of Defense (DoD) that performs contracting functions. According to Claire M. Grady, who is DoD’s Director of Procurement and Acquisition Policy, “these reviews assess the effectiveness of the contracting function, analyze and assist in any problem areas, and identify noteworthy practices that may be beneficial to all organizations.”

On December 31, 2015, Grady’s office issued the results of the DCMA’s “procurement management reviews” for FY15. The report, in newsletter form, reveals that DCMA continues “to observe insufficient documentation across the board” in official contract files. The most common documentation flaws are:

Lack of rationale for contract decision-making in instances of a contract modification, commercial item determinations, proposal evaluations, and contracting strategy, for example.

Acquisition strategies aren’t linked to market research.

Missing documentation due to over-reliance on electronic systems.

Insufficient documentation of conversations leading to contract actions.

Lack of documentation of GSA Schedule pricing compliance.

Insufficient documentation that an independent government cost estimate (IGCE) provided the most appropriate basis for price comparison.

Lack of documentation of work performed by Contracting Officer Representatives (CORs).

Technical evaluation documentation not in alignment with solicitation evaluation criteria.

In addition to documentation deficiencies, DCMA notes that proposed prices were accepted without attempts to negotiate, thus representing “lost opportunities to save money or obtain better business deals.” The agency also found that annual reviews of COR files were not being conducted.

In a more positive vein, DCMA observed what it called “impressive” dedication by DoD’s contracting workforce and a “commitment to mission success.” They made note of leaders’ efforts to keep morale up and provide for training opportunities and well as electronic resources.

DCMA’s report also devotes attention to the unique challenge e-mails represent in documenting contract files. Because of the dominance of electronic communication, DCMA concedes that “the question of what should go into the official file is getting harder and harder to answer.” The agency recommends that “contracting personnel … do some critical thinking prior to putting e-mail correspondence into the file.” It recommends that the following questions be asked:

Does the e-mail contain verbiage inappropriate for an official contract file?

Does the e-mail provide a clear, succinct summary of the information for the contract file?

If the e-mail represents a decision, is all necessary information to support that decision contained in the e-mail or is a memorandum more appropriate?